RAILWAYS RENATIONALISED

Ministers step in as 70% slump in passengers puts the private train firms at risk of collapse

BRITAIN’S railways will be partly renationalised to help them survive the coronavirus outbreak.

In an extraordinary announcement, ministers unveiled plans yesterday to take control of rail operators to keep trains running through the crisis.

The number of passengers has fallen by up to 70 per cent in the past week, putting private operators at serious risk of going out of business.

Transport Secretary Grant Shapps was forced to act amid concerns the network could grind to a halt in weeks, making it impossible for key workers, such as NHS staff, to get to work. The alternative – allowing rail firms to enter insolvency – would have ended up costing taxpayers more and caused major disruption to passengers at a time of crisis, he said.

Passengers will be eligible for refunds on season tickets and advanced bookings. The railways have not been under public ownership since 1994.

Under the new emergency measures agreement, the Department for Transport will take responsibility for the financial risks involved in running rail networks.

Fares will be paid to the Government and rail franchises – the contracts signed between the Government and private operators – will be suspended for six months, with a review at the end of September.

Operators will be paid a small ‘management fee’ to keep a skeleton service, about half the usual number of trains, running during the crisis.

The fee is to incentivise rail firms to meet performance targets and will be far less than the profits they were making before the coronavirus outbreak. Operators who do not agree to the new measures will be forcibly taken over by the Government’s Operator of Last Resort, which already runs the Northern and LNER networks. The measures are likely to require billions in taxpayer funding to cover staffing and the cost of leasing trains. But officials insist the measures are more cost effective than allowing firms to go under.

Mr Shapps said: ‘We are taking this action to protect the key workers who depend on our railways to carry on their vital roles, the hard-working commuters who have radically altered their lives to combat the spread of coronavirus and the frontline rail staff who are keeping the country moving.

‘People deserve certainty that the services they need will run or that their job is not at risk in these unprecedented times.’

The move was welcomed by Labour, which has long campaigned for a renationalisation of the railways. Transport spokesman Andy McDonald said: ‘Labour backs measures that will keep key workers and freight moving on our railway during this crisis.

‘There are very few emergency options available in these most difficult of circumstances.’

Paul Plummer, chief of the Rail Delivery Group, which represents operators, said: ‘The industry strongly welcomes the Department for Transport’s offer of temporary support and, while we need to finalise the details, this will ensure that train companies can focus all their efforts on delivering a vital service at a time of national need.’

Anthony Smith, chief executive of passenger watchdog Transport Focus, said: ‘Creating stability is important for passengers and for the wider economy; train operators must survive to keep services running in these challenging times and get back up and running again as soon as this is over. It is right that government and train companies have recognised the exceptional circumstances posed by coronavirus and allowed refunds on advance tickets and unused time on season tickets.

‘This victory for common sense will be a welcome relief for passengers who feared that they had lost their money.’

First Group, which runs Great Western Railway, South Western Railway, TransPennine Express and Avanti West Coast said it welcomed the emergency measures.

The network was first nationalised in 1948 by Clement Attlee’s postwar Labour government, with the ‘Big Four’ private companies – GWR, LMS, LNER and Southern – being taken over to form British Railways. By the time BR was privatised under John Major, steam locomotives had been replaced by diesel and electric – but a third of the network had closed as a result of the Beeching cuts in the 1960s.

‘Keep key workers and freight moving’